Spencer v NSW Minister for Climate Change and the Environment - [2010] NSWCA 75

NEW SOUTH WALES COURT OF APPEAL

CITATION:
Spencer v NSW Minister for Climate Change and the Environment [2010] NSWCA 75
This decision has been amended. Please see the end of the judgment for a list of the amendments.

FILE NUMBER(S):
40375 of 2008

HEARING DATE(S):
7 April 2010, 8 April 2010

JUDGMENT DATE:
13 April 2010

PARTIES:
Peter James Spencer - applicant
New South Wales Minister for Climate Change and the Environment - first respondent
Nature Conservation Trust of New South Wales- second respondent

JUDGMENT OF:
McColl JA

LOWER COURT JURISDICTION:
Supreme Court

LOWER COURT FILE NUMBER(S):
SC 30002/2008

LOWER COURT JUDICIAL OFFICER:
Rothman J

LOWER COURT DATE OF DECISION:
10 October 2008

LOWER COURT MEDIUM NEUTRAL CITATION:
[2008] NSWSC 1059

COUNSEL:
Mr P E King for the applicant
Ms E Glover for the first and second respondents

SOLICITORS:
McKells for the applicant
Dept of Environment, Climate Change and Water - first respondent
Crown Solicitor of NSW for the second respondent

CATCHWORDS:
APPEAL – procedure – application to vacate hearing dates – special leave application pending in High Court of Australia seeking to challenge validity of legislation under which administrative acts impugned in State proceedings taken.

LEGISLATION CITED:
Commonwealth Constitution
Environmental Trust Act 1998 (NSW)
Judiciary Act 1903 (Cth)
Nature Conservation Trust Act 2001 (NSW)
Native Vegetation Act 2003 (NSW)
Native Vegetation Conservation Act 1997 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)

CATEGORY:
Principal judgment

CASES CITED:
Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175
Arnold v Minister Administering the Water Management Act 2000 [2010] HCA 3; (2010) 84 ALJR 203
Arnold v Minister Administering the Water Management Act 2000 [2009] HCATrans 91
Arnold v Minister Administering Water Management Act 2000 [2008] NSWCA 338; (2008) 73 NSWLR 196
ICM Agriculture Pty Ltd v Commonwealth [2009] HCA 51; (2009) 84 ALJR 87
Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516
Spencer v NSW Minister for Climate Change, Environment and Water [2008] NSWSC 1059
Spencer v Commonwealth of Australia [2010] HCATrans 55
Spencer v Commonwealth of Australia [2010] HCATrans 34
Spencer v Commonwealth of Australia [2009] HCATrans 126
Spencer v Commonwealth of Australia [2009] FCAFC 38; (2009) 174 FCR 398
Spencer v Commonwealth of Australia [2008] FCA 1256
Stivactas v Michaletos (No 1) [1993] NSWCA 256

TEXTS CITED:

DECISION:
Orders already made on 8 April 2010:
1. Appeal listed for hearing on 12 and 13 April 2010 adjourned to 1 September 2010 before the Registrar of the Court of Appeal
2. Applicant to pay respondents' costs thrown away by adjourned hearing.

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40290 of 2009
McCOLL JA
Tuesday 13 April 2010

Spencer v New South Wales Minister for Climate Change and the Environment

Judgment

McCOLL JA: By notice of motion filed on 6 April 2010, for which an order granting short service was made that day, Peter James Spencer (the applicant) moved the Court to vacate the hearing of the appeal in this matter and to stand the appeal over to a date to be fixed.
On 8 April 2010 I made the following orders:
1. Adjourn the appeal listed for hearing on 12 and 13 April 2010 to 1 September 2010 before the Registrar of the Court of Appeal.
2. The applicant is to pay the respondents’ costs thrown away by the adjourned hearing.
I indicated I would publish my reasons for making those orders in due course. These are those reasons.
On 29 October 2009 the Registrar of the Court of Appeal specially fixed the appeal for hearing before the Court of Appeal on 12 and 13 April 2010.
The applicant appealed from a decision of Rothman J dismissing an application for judicial review in respect of steps taken by the respondents pursuant to, and in relation to, a programme entitled the “Farmer Exit Assistance Programme” (“FEAP”) administered by the second respondent: Spencer v NSW Minister for Climate Change, Environment and Water [2008] NSWSC 1059. FEAP is financed by funds provided by the Commonwealth to the State of New South Wales which, in turn, find their way to the second respondent, a body established pursuant to the Nature Conservation Trust Act 2001 (NSW).
For the purposes of considering the adjournment application I have assumed the primary judge accurately described the legislative background to the judicial review application. I do not understand any party to have contested his Honour’s description.
The applicant owns a grazing property in the upper Murrumbidgee. It appears to have been common ground before Rothman J that the effect of the operation of the Native Vegetation Conservation Act 1997 (NSW) and the Native Vegetation Act 2003 (NSW) (the “State Acts”) was to impose significant restrictions on the applicant’s use of his property for his grazing/farming interests: primary judgment (at [5]).
According to the primary judge (at [6]):
“By agreement between, relevantly, the Commonwealth and New South Wales, there is in place a scheme, implemented, it seems, for the purpose of giving effect to environmental concerns, for the funding by the Commonwealth of a financial assistance package, operated by New South Wales, for the purchase of properties, and/or the provision of financial assistance to owners of properties, affected by certain environmental legislation. The Commonwealth Acts giving effect to this agreement are the Natural Resources Management (Financial Assistance) Act 1992 (Cth) and the Natural Heritage Trust of Australia Act 1997 (Cth).”
I shall refer to the latter Acts as the “Commonwealth Acts”.
The Nature Conservation Trust Act and the Environmental Trust Act 1998 (NSW) were promulgated to implement the agreement between the State and the Commonwealth: primary judgment (at [8]).

The applicant became eligible for Farmer Exit Assistance under the FEAP after receiving advice from the Rural Assistance Authority that his property was “no longer commercially viable”: primary judgment (at [24]). As a result of the applicant so qualifying, the second respondent made an offer to purchase his property. The applicant objected to the valuation on which that offer was based and instituted the proceedings in this Court. He was unsuccessful. Hence his appeal.
The validity of the State and Commonwealth Acts was not in issue before Rothman J: primary judgment (at [29]).
The proceedings in this Court were commenced in 2008. In that year, the applicant was also the applicant in proceedings he commenced in the Federal Court of Australia against the Commonwealth of Australia. In the Federal Court proceedings he complained that the effect of the State Acts was to impose a prohibition or general restriction on the reasonable use of his property with the consequence that certain of his interests in the property had been expropriated or acquired. He also claimed that that expropriation or acquisition was effected or authorised by the operation of the Commonwealth Acts. He claimed that those Commonwealth Acts were laws with respect to the acquisition of property which were invalid insofar as they effected or authorised an acquisition of his property, because they did not provide for just terms: cf the Constitution, s 51(xxxi): Spencer v Commonwealth of Australia [2008] FCA 1256 (at [2] - [3]) per Emmett J.
The Commonwealth of Australia moved the Federal Court for summary dismissal of the proceedings, an application to which Emmett J acceded: Spencer v Commonwealth of Australia (at [193]). Mr Spencer’s appeal to the Full Federal Court of Australia was dismissed: Spencer v Commonwealth of Australia [2009] FCAFC 38; (2009) 174 FCR 398.
In dismissing the appeal the Full Federal Court followed Arnold v Minister Administering the Water Management Act 2000 [2008] NSWCA 338; (2008) 73 NSWLR 196. Special leave to appeal was granted in Arnold on 1 May 2009: Arnold v Minister Administering the Water Management Act2000 [2009] HCATrans 91.
Mr Spencer sought special leave to appeal to the High Court from the Full Federal Court decision. The special leave application came before the High Court of Australia (French CJ, Heydon and Kiefel JJ) on 5 June 2009: Spencer v Commonwealth of Australia [2009] HCATrans 126. After hearing submissions, French CJ indicated that the Court was not disposed to grant special leave as at that date, but that it might be that in the light of the outcome of the appeal in Arnold, the position could be revisited. Accordingly, the Court adjourned the application for special leave until after Arnold was determined.
On 9 December 2009 the High Court handed down its decision in ICM Agriculture Pty Ltd v Commonwealth [2009] HCA 51; (2009) 84 ALJR 87. French CJ and Gummow and Crennan JJ (at [46]) held that the legislative power of the Commonwealth conferred by s 96 and s 51(xxxvi) of the Constitution did not extend to the grant of financial assistance to a State on terms and conditions requiring the State to acquire property on other than just terms. Heydon J held (at [247] – [255]) that the Commonwealth and State legislation there under consideration established a scheme enabling the acquisition by New South Wales of property otherwise than on just terms in contravention of s 51(xxxi) of the Constitution. On 10 February 2010 the High Court handed down its decision in Arnold v Minister Administering the Water Management Act 2000 [2010] HCA 3; (2010) 84 ALJR 203 in which it applied ICM.
On 23 February 2010, the parties in the Full Federal Court appeal proceedings appeared before Gummow J. On that occasion it appears that Mr P King, who appeared for the applicant, sought to move on a notice of motion to join the State of New South Wales in the High Court proceedings: Spencer v Commonwealth of Australia [2010] HCATrans 34. Gummow J indicated that it would be helpful if any draft amended pleading or further pleading the applicant would wish to pursue if he was successful in the High Court was available at the special leave application. His Honour was also of the view that it would not be appropriate at that stage to draw in the State of New South Wales.
The applicant’s special leave application came back before the High Court (Gummow, Heydon and Bell JJ) on 12 March 2010: Spencer v Commonwealth of Australia [2010] HCATrans 55. On that occasion the Court had before it a draft proposed pleading that Mr King sought to file if given leave to do so. The Court referred the special leave application to an enlarged Full Court in order to receive fuller argument. The materials before the Full Court are to include the draft proposed pleadings.
The instant motion to vacate the hearing date was supported by an affidavit sworn by the applicant’s solicitor, Mr McKell. He deposed that the referred special leave application had been fixed before the Full Court of the High Court for 16 and 17 June 2010. He attached to his affidavit correspondence with the respondents in this Court forwarding to them the draft proposed pleading which will be before the Full Court.
Mr King informed the Court that the effect of the draft proposed pleading is that the State of New South Wales will now become a party to the High Court special leave application. The draft proposed pleading reveals that the applicant has put in issue in the High Court the validity of the State Acts, which was not in issue before either Emmett J or in the Full Federal Court nor, as I have said, before Rothman J.
Paragraph 63 of the draft proposed pleading in the High Court asserts:
“Further or alternatively by reason of the measures the Applicant’s land has been rendered commercially unviable, the value of the land has been significantly reduced as a marketable commodity, and the Applicant has suffered loss and damage.”
According to the draft proposed pleading, therefore, the applicant seeks orders against the State of New South Wales for the provision of equitable compensation and accounting in the event the State Acts are held to be invalid – they having had the effect of rendering his property commercially unviable.
The applicant’s case in this Court attacked the offer made as a result of the advice that his property was no longer commercially viable. The applicant sought, as ancillary to his application for judicial review, both orders varying the offer made to purchase his land by the second respondent, and, alternatively, damages – both intended I assume to restore the applicant to the position he would have been in if this property had not been rendered “commercially unviable” and an offer to purchase it for market value unaffected by the State Acts had been made.
Both the mooted claim in the draft proposed pleading and the claim in the proceedings in this Court, directly and indirectly clearly involve consideration of the value of the applicant’s property as affected by the operation of the State and Commonwealth Acts.
If the High Court were to declare the State Acts invalid, then the premise of their validity, which underpinned the proceedings before Rothman J, would be removed. Invalidity may have consequences in relation to steps already taken in implementation of programmes such as the FEAP established under their aegis: cf Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516.
It would be undesirable for this Court to proceed to hear an appeal which proceeds on the premise that the State Acts pursuant to which the impugned administrative acts were taken was valid when there is soon to be a hearing in the High Court testing that underlying premise.
Ms E Glover of counsel, who appeared for the respondents, informed the Court that the first respondent neither consented to, nor opposed, the application. The second respondent opposed it. Ms Glover pointed out that the second respondent was a body corporate established pursuant to the Nature Conservation Trust Act, did not represent the Crown and was not an instrumentality or agent of the State, nor could it render the State liable for any debts, liabilities or obligations of the Nature Conservation Trust – a proposition Rothman J accepted (at [48]). She also pointed to his Honour’s conclusion (at [48]) that there was no basis upon which it could be found that the first respondent, the NSW Minister for Climate Change, in his capacity as such, acted in a manner which would render his conduct subject to judicial review.
However Ms Glover accepted that the second respondent administered the FEAP using funding from the Commonwealth. She also accepted that there was a potential for conflict between a decision of the High Court which might lead to the applicant being able to claim compensation from the State on a basis which depended on the invalidity of the legislative scheme and a decision of this Court which also considered the proper compensation for the acquisition of the property, but proceeded on the premise that the legislative scheme was valid.
Ms Glover properly conceded she could not point to any prejudice, save as to costs, that the respondents would suffer if the matter was adjourned.
Mr King could not explain why a date for the hearing of the appeal had been taken in October 2009 having regard to the fact that the idea of joining the State of New South Wales in the High Court emerged from a remark Heydon J made in the course of the special leave hearing on 5 June 2009 – and, I note, was flagged by Emmett J (at [215]) in 2008. The applicant ultimately sought to give effect to that idea by filing the notice of motion in the High Court which came before Gummow J in February 2010 seeking to join the State as a party accompanied by the draft proposed pleading (or an earlier version thereof).
The applicant should have appreciated, once he started to consider joining the State of New South Wales in the pleading to be placed before the High Court (and presumably started to consider the challenge to the validity of the State laws), the potential for conflict and/or inconsistency between decisions in the High Court proceedings and in the proceedings in this Court. It does not appear, however, that it really occurred to the applicant’s counsel that it would be inappropriate for the appeal either to be set down, or to proceed, on the listed dates, until in or around the filing of the motion on 7 April 2010. This failure to appreciate the significance of the two proceedings, and the late adjournment application, has had the consequence of wasting two days in the Court’s calendar which could have been allocated to other litigants’ cases.
This Court would not readily accede to an application to vacate the hearing of an appeal. Its primary concern is to ensure that appeals are listed and heard in accordance with the indications parties give when they agree to take a date for hearing. In doing so it is concerned not only with the position of the parties to the instant proceedings, but also with achieving “a just but timely and cost-effective resolution of [the] dispute” consistent with discharging its general obligation to ensure all proceedings are disposed of as expeditiously as possible: cf Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 (at [93]).
The approach pursuant to which a court would accede even to a late application for an adjournment of legal proceedings which could be accommodated by an appropriate order for costs, in the absence of irreparable prejudice (Stivactas v Michaletos (No 1) [1993] NSWCA 256 per Kirby P (Clarke JA agreeing; Cripps JA dissenting) is long gone. There is no “right” to an adjournment: cf Aon (at [96], [99]) per Gummow, Hayne, Crennan, Kiefel and Bell JJ.
As the foregoing discussion reveals, however, the position in this case is highly unusual. The potential for a High Court decision to remove the legislative underpinning of the proceedings in this court is such as to warrant an adjournment of the hearing in this Court to avoid the possibility of conflicting judgments. However, the applicant’s tardiness in bringing on the application for an adjournment is such as to warrant he bear the costs thrown away by the adjournment. It was for these reasons that I made the orders on 8 April 2010 that the hearing of the appeal be adjourned on the basis that the applicant pay the respondents’ costs thereby thrown away.
Finally I would note that Mr King foreshadowed that the draft proposed pleading in the High Court raised the question whether the appeal should be adjourned to permit the service of a notice pursuant to s 78B of the Judiciary Act 1903 (Cth). He had not filed a notice of a constitutional matter as required (Uniform Civil Procedure Rules 2005, 1.22) and did not seek leave to do so. It did not seem to me that absent a s 78B notice setting out the matters the rules require, the Court should apply the “automatic” adjournment dictated by s 78B.
**********

AMENDMENTS:

14/04/2010 - 7 and 8 April 2010 hearing dates
Orders made on 8 April 2010 - Paragraph(s) FRONT COVER SHEET

23/04/2010 - Name of first respondent incorrect: changed to The NSW Minister for Climate Change and the Environment
Solicitors acting for first respondent: changed to Dept of Environment, Climate Change and Water - Paragraph(s) Front cover sheet
First page of judgment

LAST UPDATED:
23 April 2010